Hong Kong SFC licensing and compliance hints – March 2022

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Authored by: Jennifer Baccanello

Deadline for the Asset and Wealth Management Activities Survey

According to the SFC’s Circular to Licensed Corporations Engaged in Asset and Wealth Management of 25 February 2022, licensed corporations should ensure that their responses to the Asset and Wealth Management Activities Survey are submitted on or before 25 April 2022.

Business continuity planning

In light of the possible Compulsory Universal Testing scheme which may be implemented by the HKSAR Government at some point in the future, now is the time for licensed corporations to review and make any necessary updates to their business continuity planning. In the circular of 7 March 2022, Importance of business continuity planning amidst latest COVID-19 situation, the SFC highlights a range of measures that licensed corporations should consider when reviewing their business continuity plans, such as assessing the impact of temporary staff shortages and reviewing functions performed by service providers, among other measures. Licensed corporations should consult the SFC’s dedicated FAQ webpage, Information for firms and the market on COVID-19, for any further updates.

Online arrangements for sitting Papers 1, 2, and 6

Due to current social distancing restrictions, the Hong Kong Securities and Investment Institute has put in place temporary arrangements until 30 April 2022 for individuals who wish to undertake the Licensing Examination for Securities and Futures Intermediaries Papers 1, 2, and 6. In addition, all in-person examinations in Hong Kong have been cancelled during this period. For further details, candidates should consult the full guidelines. Meanwhile, the SFC has allowed an extension period of three calendar months for licensed individuals who are required to pass regulatory examinations (see Q1, Licensing related matters in light of the COVID-19 pandemic (SFC’s COVID-19 FAQ)).

Extension period for CPT hours

Given that some Continuous Professional Training courses may have become unavailable temporarily or licensed individuals may be unable to attend such training in person, the SFC has allowed for an extension period of three calendar months for all licensed individuals who are required to complete additional CPT hours on or before 31 May 2022 (see Q2, SFC’s COVID-19 FAQ).

Flexible submission arrangements for licensed corporations submitting audited accounts

In its circular of 4 March 2022, Submission of financial statements, other documents and auditor’s report under section 156(1) of the Securities and Futures Ordinance, the SFC advises that licensed corporations facing difficulty in submitting original copies of audited accounts with wet-ink signatures can first submit a scanned copy by the submission deadline (i.e. within four months after the end of the licensed corporation’s financial year), followed by the original copy, as soon as reasonable practicable after the submission deadline (see Q11, SFC’s COVID-19 FAQ). “Audited accounts” includes financial statements, other documents and the auditor’s report. If licensed corporations anticipate a delay in preparing the audited accounts, an extension can be applied for, and the SFC will consider such applications pragmatically (see Q10, SFC’s COVID-19 FAQ).